Editor’s Note: This testimony has been frivolously edited for size. Ms. Corlette’s full testimony is obtainable right here.
At CHIR, we research how medical health insurance works and doesn’t work for folks. People can not reap the benefits of technological advances in well being care if they don’t have medical health insurance protection or face insurmountable monetary boundaries to well being care providers. Therefore, I can be focusing my remarks right now on how proposed federal insurance policies, particularly the House-passed H.R. 1, will have an effect on folks’s entry to reasonably priced, top quality medical health insurance.
The funds reconciliation bundle—H.R. 1—handed by the U.S. House of Representatives on May 22 represents an enormous redistribution of wealth from the least to essentially the most properly off. Specifically, households on the backside 10% of the revenue scale would expertise a useful resource decline of on common $1,600 per yr, largely as a consequence of reductions in Medicaid and SNAP spending. Meanwhile, households within the prime 10% of revenue would expertise a rise in assets by on common $12,000 per household, largely as a result of invoice’s tax cuts.
If this invoice is enacted and Congress fails to increase the improved premium tax credit that expire on the finish of this yr, CBO initiatives that 16 million folks will turn out to be uninsured. This represents an over 50 p.c improve within the variety of people who find themselves at present uninsured, reversing protection positive factors achieved by the Affordable Care Act (ACA).
The invoice would even have a devastating affect on well being care suppliers, significantly these suppliers serving rural and underserved communities. The Urban Institute has estimated that the mixed cuts in H.R. 1 and finish of enhanced premium tax credit will cut back supplier income by $1.03 trillion between 2025-2034, with 40% of the decline attributable to hospitals and 11% to doctor providers.
Deep, Damaging Cuts to Medicaid and CHIP
H.R. 1 accommodates quite a few provisions that may minimize gross Medicaid and CHIP spending by $863.4 billion over the 10-year funds window, resulting in 7.8 million newly uninsured folks. In specific, the invoice takes purpose on the ACA’s Medicaid growth by sharply chopping enrollment amongst folks eligible for growth, making it more durable for growth enrollees to entry care, and lowering states’ incentives to undertake or proceed their growth applications.
Work necessities
H.R. 1 features a requirement that states implement a piece requirement for his or her Medicaid applications. The Urban Institute has examined the affect of a much less restrictive 2023 work requirement proposal and located that 5.5 million to six.3 million growth people ages 19-64 could be disenrolled as a result of they may not efficiently navigate burdensome processes and techniques to report their work actions or get hold of exemptions.
More frequent eligibility redeterminations
Currently, states reassess eligibility for Medicaid growth enrollees each twelve months. This invoice would require all states to conduct eligibility redeterminations for growth people each six months. This coverage would considerably elevate the chance that individuals are faraway from protection solely due to paperwork points, interrupting continuity of care and growing administrative burdens for states, suppliers, and managed care plans.
Increasing prices for eligible Medicaid enrollees
Most Medicaid enrollees, as a consequence of their low revenue, don’t face premiums and are topic to solely nominal co-payments. H.R. 1 would require all states to cost cost-sharing to growth enrollees with annual incomes between $15,650 and $21,597. The analysis literature on cost-sharing in Medicaid is evident: Even modest will increase in co-payments result in diminished entry to mandatory care.
Discouraging states from closing the Medicaid “coverage gap”
H.R. 1 would repeal present monetary incentives below the ACA for states to develop their Medicaid applications, making it much less probably that the remaining 10 non-expansion states take up the growth and leaving practically 2.9 million low-income adults uninsured. This consists of 1.5 million folks within the “coverage gap” which is the place individuals are too poor for Marketplace tax credit however not poor sufficient to qualify for his or her state’s Medicaid program.
Preventing states from financially supporting Medicaid via supplier taxes
All states apart from Alaska depend on supplier taxes as a vital income to help their Medicaid applications. Under H.R. 1, states could be prohibited from establishing any new supplier taxes or growing present taxes. This signifies that states would not be capable of use new or elevated supplier taxes to lift extra revenues to finance their share of Medicaid prices. States additionally would have zero flexibility on supplier taxes shifting ahead. This might hinder states’ capacity to reply to the evolving wants of this system and financial circumstances.
Tying folks up in pink tape
In addition to requiring folks to endure the eligibility redetermination course of twice per yr, the invoice would block regulatory insurance policies that considerably enhance the velocity and effectivity of Medicaid and CHIP eligibility and enrollment techniques. CBO has beforehand estimated that by itself, rescinding these laws would minimize Medicaid enrollment by 2.3 million folks in 2034.
Financially punishing states that use their very own funds to cowl sure residents
Under this invoice, growth states that present protection or monetary help to undocumented immigrants or to sure lawfully residing immigrants utilizing their very own funds would face a minimize within the federal matching price for the Medicaid growth inhabitants from 90 to 80%. This would come with efforts to cowl folks lawfully admitted to the U.S. for humanitarian causes, equivalent to, most lately, folks from Ukraine and Afghanistan.
Threats to Marketplace Enrollment, Affordability, and Stability
Approximately 8.2 million individuals are projected to lose insurance coverage as a result of mixed affect of Congress’ failure to increase the improved premium tax credit that expire in 2025 and the Marketplace provisions in H.R. 1. Policies that make it more durable to enroll in and hold medical health insurance deter wholesome folks from enrolling in Marketplace well being plans, whereas folks with excessive medical prices will persevere via these hurdles. This will end in a smaller, sicker pool of enrollees. Insurers might want to elevate their premiums to account for a extra expensive group of individuals and a few might select to exit the market fully (as the corporate Aetna lately determined to do).
Indeed, in states with early submitting deadlines for insurance coverage corporations to submit their proposed premiums for 2026, we’re seeing eye-popping will increase. Although non-expansion states have later price submitting deadlines, we are able to anticipate insurers to undertaking even larger premium spikes in these states, as a higher proportion of their populations are enrolled in Marketplace protection. In the speed filings we’ve reviewed at CHIR so far, insurers are warning state insurance coverage regulators that their premiums might want to rise even additional if H.R. 1 is enacted.
Raising Costs for People with Commercial Health Insurances
H.R. 1 raises folks’s well being care prices by:
- Modifying the components for figuring out a person or household’s premiums and cost-sharing. This would permit insurance coverage corporations to impose an extra $900 in deductibles and different price sharing on households (as much as $450 for a person) with any non-public medical health insurance, together with the 160 million folks with employer-based insurance coverage.
- Imposing important new tax burdens on low-income Marketplace enrollees by requiring them to repay premium tax credit in the event that they under-estimate their revenue.
- Changing federal coverage relating to cost-sharing reductions for Marketplace well being plans, which in flip would finish a state-driven apply often known as “silver loading,” elevating web premiums for at least 10 million Marketplace enrollees, and growing the numbers of uninsured by 1.2 million.
- Allowing insurers to cut back the generosity of their plans, in order that they may cowl as little as 66% of prices however nonetheless be referred to as a “Silver” plan, although the ACA requires such plans to cowl 70% of prices. This provision permits the invoice sponsors to say they’re “reducing” premiums, even although they’re doing so primarily by making protection skimpier.
- Imposing a $5-month premium penalty on sure low-income enrollees, although they’re eligible for $0 premium protection.
- Prohibiting protection of remedy for gender dysphoria, elevating affected person prices for providers beneficial by nearly all main medical associations.
Limiting Eligibility and Enrollment Opportunities
The invoice would additional slash enrollment in Marketplace protection by taking away eligibility for over 1 million lawfully current immigrants and chopping again on enrollment alternatives, together with by:
- Reducing open enrollment durations for all Marketplaces, together with state-based Marketplaces (SBMs), from 76 to simply 44 days.
- Taking away SBMs’ conventional authority to determine particular enrollment durations (SEP) to fulfill the wants of their shoppers and markets. The invoice would prohibit all Marketplaces from establishing a SEP primarily based on revenue, eliminating a key pathway for low-income folks to entry protection as quickly as they study they’re eligible.
- Barring most lawfully current immigrants, together with folks with folks with “Deferred Action for Childhood Arrivals” (DACA) standing, from eligibility for Marketplace premium tax credit.
Increasing Red Tape
H.R. 1 requires candidates and enrollees to navigate a maze of pink tape to acquire and preserve reasonably priced medical health insurance protection, together with by:
- Imposing onerous new paperwork necessities on all Marketplace candidates. This provision would successfully prohibit computerized re-enrollment within the Marketplaces, an extended standing trade apply throughout all traces of insurance coverage. All shoppers, new or returning, could be required to pay full value till they actively confirm, and the Marketplace has confirmed, particular eligibility necessities. If they can not pay full value, protection could be cancelled or terminated, leaving them uninsured for a full yr till the subsequent open enrollment interval.
- Requiring folks enrolling in a SEP to manually submit extra paperwork proving their eligibility earlier than they’ll get protection.
- Requiring Marketplaces to disclaim premium tax credit to folks when the IRS doesn’t have a document of them submitting the right tax type.
- Requiring 2.5 million extra folks to manually submit paperwork to show their revenue, and shorten the period of time they’ve to supply that documentation.
These new paperwork necessities can be imposed after the federal authorities has eradicated the roles of a whole bunch of Marketplace caseworkers and diminished funding for Marketplace Navigators by 90%, that means shoppers received’t get the assistance they’ll want to chop via the pink tape.
Unprecedented federal mandates and new prices for states
H.R. 1 would get rid of flexibilities states have lengthy needed to function an SBM, impose expensive new mandates, and cut back their income base. These modifications would undermine states’ worth proposition for establishing or sustaining an SBM. At the identical time, the invoice would infringe on states’ long-standing primacy over the regulation of personal medical health insurance by imposing arbitrary new federal guidelines. This is why the National Association of Insurance Commissioners (NAIC) and a coalition of state-based Marketplaces have expressed their sturdy objections to this laws.
The reconciliation invoice would get rid of this long-standing flexibility throughout a variety of SBM capabilities, from enrollment durations to eligibility techniques, whereas additionally imposing a number of new and expensive operational mandates. This will make establishing or sustaining an SBM much less enticing for states.
“Waste, Fraud and Abuse” as Red Herring – a Missed Opportunity to Counter Marketplace Fraud
Supporters of modifications to Marketplace eligibility and enrollment insurance policies confer with a severe Marketplace difficulty: Unscrupulous brokers enrolling folks in Marketplace protection or switching their plans with out their permission within the pursuit of commissions from well being plans. However, the invoice does completely nothing to extend oversight or accountability for unethical brokers and ignores easy measures to handle dealer fraud. In truth, in a telling transfer, H.R. 1 would enshrine into regulation each provision of the Marketplace Integrity rule that hinders client enrollment however not the one provision that touches on dealer oversight.
Cost efficient and modern applied sciences that may assist folks higher monitor and management power circumstances are thrilling alternatives to enhance well being outcomes and decrease prices. But folks want to have the ability to entry and afford medical health insurance protection with a purpose to reap the benefits of such applied sciences. As drafted, H.R. 1, mixed with inaction to increase enhanced premium tax credit, would really make it more durable for folks to acquire well being care, by tying them up in a maze of paperwork, elevating their premiums, and imposing new federal mandates. The consequence can be 16 million folks newly uninsured and tens of millions extra dealing with increased prices with a purpose to get hold of wanted well being care providers.